The stock market closed higher on Friday as latest jobs report raised hopes for rate cuts from the Federal Reserve. Both S&P 500 and NASDAQ booked their all-time closing high this year. S&P 500 grew 0.5% to 5,567, while NASDAQ rose 0.9% to 18,353.
Despite the increased in unemployment rate in June, the Labor Department reported additional 206,000 jobs during the month, better than the 200,000 forecast.
Tweet of the Day
Zscaler $ZS is a tremendous value here at $203. Its Fiscal Year end is July 31. Once that passes, analysts will start looking at 2025 estimates. The stock currently sells for just 12x 2025 revenue est, a big drop from 51x from my 2021 Q3 report. I think the stock is worth $261.
— David Sharek (@GrowthStockGuy) July 5, 2024
Chart of the Day
Here is the ten-year chart of Celsius (CELH) as of May 28, 2024, when the stock was at $83.
Celsius stock has been one of the market’s worst during the past month, and the reason was slowing growth. During the past five quarters, the company’s revenue growth has gone from 95% to 112%, 104%, 95% and most recently 37%. It is impossible to keep doubling revenue every quarter. Growth was inevitably going to slow. What is more concerning is that Celsius delivered 37% sales growth and missed estimates of 51%, as its largest distributor lowered its Celsius on-hand inventory level. This relationship with the distributor began a year ago, so they are still learning from each other.
Management stated that there is still huge opportunity in branded Celsius coolers. The company put out 3,000 last quarter alone. However, even if America slows, there is vast opportunity to sell Internationally. Last quarter, Celsius entered Canada and announced plans to expand in Australia, France, Ireland, New Zealand, and the United Kingdom. Note that International sales were just 5% of overall sales last quarter.
CELH was sold from our Aggressive Growth Portfolio. However, David Sharek, Founder of School of Hard Stocks, likes CELH long-tem and will continue to hold it in our Growth Portfolio.
